UK: GOVERNMENT LAUNCHES INVESTIGATIVE AUTHORITY TO COMBAT DOMESTIC ECONOMIC CRIMES
On 1 November, UK Minister of State for Security and Economic Crime Ben Wallace officially launched the National Economic Crime Centre (NECC), a London-headquartered collective of government and non-governmental agencies aimed at addressing economic crimes. The NECC will prioritise high-risk domestic sectors such as ports, borders, public procurements and grants, to combat corruption and promote integrity in the domestic and global business environment. Intended targets of the initiative are broad, encompassing all businesses that facilitate or fail to report illegitimate financial activities. However, the NECC’s preliminary focus will be estate agents who launder money through high-value property purchases, as well as solicitors and accountants, who reportedly facilitate the laundering of GBP 100 billion each year.
SOUTH AFRICA: BANK SCANDAL IMPLICATES POLITICIANS, OFFICIALS AND AUDITORS
On 22 November, the Democratic Alliance, the official opposition party in South Africa, brought a criminal case against the Economic Freedom Fighters (EFF), another opposition political party, and its two leaders Julius Malema and Floyd Shivambu, over embezzlement allegations. The case follows a report published by the South African Reserve Bank into embezzlement connected to VBS Mutual Bank, a mutual bank that has now entered liquidation. The report found that EFF and its two leaders had received ZAR 1.8 million (GBP 101,560) through various shell companies ultimately owned by the party and themselves. The report identified funds totalling ZAR 2 billion (GBP 112.8 million) embezzled via VBS, in a scheme that involved 53 people, including senior banking and government officials, KPMG auditors and politicians, who benefited through bribes or fraudulent loans. The report also implicated two other South African parties, including the ruling African National Congress party.
EQUATORIAL GUINEA: INTERNATIONAL OIL SERVICES COMPANIES FINED, BANNED FOR FAILING TO COMPLY WITH REGULATIONS
In early November, the Ministry of Mines and Hydrocarbons for Equatorial Guinea fined three international oil companies, Schlumberger, TechnipFMC and Subsea 7, for failing to comply with local regulations. According to 2014 National Content Regulations, international companies must register with the ministry’s local content department and give preference to local contractors, which these three companies were reportedly not doing. Later in the month, the government thanked Schlumberger and TechnipFMC for their contributions and commitment to rectifying their errors, whereas Subsea 7 was banned from further operations in Equatorial Guinea, reportedly for a failure to heed the ministry’s warnings. A ministry official indicated that an audit into all international oil companies’ adherence to local content regulation is ongoing.
MIDDLE EAST & NORTH AFRICA
ISRAEL: AIRBNB FACES LAWSUIT FOR DELISTING SETTLEMENTS
On 22 November, an Israeli class action lawsuit was filed against Airbnb, a hospitality company, for removing listings of around 200 homes in settlements in the Occupied Palestinian Territories (OPT). Airbnb’s decision to delist the homes came after criticism that they were profiting from lands where people have been displaced. A 2017 Israeli law empowers courts to award cash compensation to claimants who prove they have been denied goods or services because of where they live. The delisting applies only to Israeli settlements in the OPT and does not apply to Israel itself, nor to East Jerusalem or the Golan Heights.
FRANCE/SAUDI ARABIA: SANCTIONS AGAINST 18 SAUDIS CONNECTED TO THE KILLING OF JAMAL KHASHOGGI
On 22 November, France placed sanctions on 18 Saudi nationals connected to the murder of Jamal Khashoggi, the Saudi journalist and dissident, in Istanbul in early October. This comes a week after US sanctions were announced against 17 Saudi nationals, which included asset freezes and travel bans, and days after Germany announced a similar travel ban, valid across the Schengen border-free zone. The UK and EU have indicated that they would consider sanctions against Saudi Arabia if evidence links the government to Khashoggi’s killing, which took place in the Saudi consulate, whilst Canada has announced that it is also considering imposing sanctions. These moves come amid widespread condemnation of Khashoggi’s murder and the alleged involvement of high-ranking Saudi officials, in addition to further reprisals including the suspension of future weapons sales by states such as Denmark.
JAPAN: CHAIRMAN OF NISSAN-RENAULT-MITSUBISHI ALLIANCE ARRESTED
Suspected of understating his income by GBP 34.5 million over five years, Carlos Ghosn, the Brazilian-born chairman of Nissan, Renault, and Mitsubishi, was arrested in Tokyo on 19 November. Despite denying the charges, Ghosn has since been dismissed from his roles at Nissan and Mitsubishi. By contrast, Renault has chosen to retain his services while he remains ‘temporarily incapacitated’. Ghosn also stands accused of using a Netherlands-incorporated subsidiary to purchase personal residences, and of entering into high-value consulting contracts with family members. If convicted, Ghosn could be sentenced to ten years’ imprisonment.
MALAYSIA/FRANCE: MALAYSIAN ANTI-CORRUPTION COMMISSION REOPENS INVESTIGATION INTO FRENCH WARSHIP DEAL
On 19 November, Malaysia’s Anti-Corruption Commission reopened investigations into a USD 1.2 billion deal signed by Najib Razak, former prime minister and then defence minister, for the purchase of two submarines from French warship builder DCN International in 2002. The submarine maker allegedly paid more than USD 134 million in kickbacks to a company linked to one of Razak’s aides who brokered the deal. Four French executives involved in the deal have been charged in France, where there is an open criminal case against Razak’s former aide. This is the latest probe into Razak, who, along with his wife, has been subject to sustained allegations of corruption. These principally concern the 1MDB scandal, in which senior officials allegedly embezzled billions from a government fund, and for which Razak faces 32 criminal charges, including fraud, corruption and money laundering.
VENEZUELA: GOVERNMENT SEEKS TO EXTRADITE ALEJANDRO ANDRADE
The Venezuelan government is seeking to extradite Alejandro Andrade, Venezuela’s national treasurer between 2007 and 2011, from the US to face accusations of money laundering. Andrade pleaded guilty to charges of conspiracy to launder money and agreed to a plea deal with US prosecutors. Documents were recently unsealed which revealed that Andrade had been cooperating with US authorities investigating widespread corruption in Venezuela, including allegations against President Nicolás Maduro and his family.
PERU: ALAN GARCÍA SEEKS POLITICAL ASYLUM IN URUGUAY
Former Peruvian President Alan García (2006-2011) requested political asylum in Uruguay after he was barred from leaving Peru for 18 months while Peruvian authorities investigated him for corruption. García has been under investigation by the Peruvian Attorney General’s Office for having allegedly received a series of bribes from Odebrecht, a Brazilian construction conglomerate, in exchange for lucrative public contracts during his administration. Peruvian lawmakers portrayed the asylum request as a ploy by García to evade prosecution.
RUSSIA/MONACO: DMITRY RYBOLOVLEV CHARGED IN MONACO CORRUPTION CASE
On 7 November, Russian billionaire Dmitry Rybolovlev was charged as part of a corruption investigation in Monaco. Authorities have not released any details regarding the charges Rybolovlev faces, but the probe has reportedly focused on whether he sought to influence Monegasque law enforcement officials in connection with his ongoing dispute with Swiss art dealer Yves Bouvier. Rybolovlev accuses Bouvier of overcharging him by a total of USD 1 billion for several pieces of art which Bouvier sold to him between 2003 and 2014. In 2017, French newspaper Le Monde published text messages that appear to show that Philippe Narmino, then-justice minister of Monaco, stayed at Rybolovlev’s chalet in Switzerland several days before Bouvier’s arrest in 2015 in connection with Rybolovlev’s allegations.
ARMENIA: GAZPROM SUBSIDIARY FACES TAX EVASION INVESTIGATION IN ARMENIA
On 14 November, the Armenian tax authorities launched a criminal investigation into Gazprom Armenia, a local subsidiary of the Russian state-owned oil and gas company. The authorities accuse the company of evading millions of dollars in tax in 2016 and 2017 by over-stating costs and under-reporting profits. The investigation comes in the midst of negotiations between Gazprom and the Armenian government on the price of gas supplies to the country, with the current price agreement expiring in December. Since Armenia’s Velvet Revolution in May 2018, the country’s authorities have also investigated South Caucasus Railway, a subsidiary of Russia’s state-owned railway company which operates Armenia’s rail system, accusing the company of tax irregularities totaling USD 60 million.
KAZAKHSTAN: DEPUTY ENERGY MINISTER ANATOLY SHKARUPA ARRESTED ON SUSPICION OF EMBEZZLEMENT
On 18 November, a court in Astana, Kazakhstan, arrested Deputy Energy Minister Anatoly Shkarupa for two months pending an investigation into allegations of corruption relating to his tenure as mayor of Saran, a small city in central Kazakhstan. Prosecutors believe that in 2015 Shkarupa embezzled approximately USD 586,000 of state funds allocated for installing central heating meters in Saran. Reportedly, the city does not have any central heating, and meters were allegedly mounted on walls without being connected to any other equipment.